Indian shares edged higher on Monday, heading for a fifth straight session of gains after earnings of blue chips such as Hindalco Industries Ltd beat street estimates, boosting hopes that the economy was recovering.

 

Earnings for the January-March quarter have so far been largely better than street estimates, raising optimism over India's economic prospects, with investors betting that above-average monsoon rainfalls would support rural demand.

 

However, traders say the current rally could be speculative as foreign investors have been buying very little in cash and that most of their buying has been in index futures and options.

 

Traders also warned that the gains could be capped by global developments, including the prospect of a U.S. rate hike, even as foreign investors bought a net 103.3 billion rupees ($1.54 billion) in index futures and options over the past two sessions.

 

"Going ahead, U.S. Federal Reserve meeting and Brexit are the key triggers to watch, which will keep upside capped."

 

The broader NSE Nifty was up 0.25 percent at 8177.3 as of 0809 GMT, after gaining 5.6 percent over the previous four sessions.

 

The benchmark BSE Sensex was 0.27 percent higher at 26730.82.

 

Hindalco Industries shares surged 12 percent after the company said its net profit more than doubled in the January-March quarter, surprising analysts and beating estimates.

 

Shares of state-run State Bank of India gained 2 percent after India's biggest lender on Friday reported quarterly earnings that were worse than expected but said fewer than feared of its loans risked turning sour.

 

Among decliners, shares of Sun Pharmaceutical Industries fell 1 pct after the U.S. Department of Justice subpoenaed India's largest drugmaker over the pricing and marketing of generic drugs it sells in the United States, as part of a broader investigation.